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Retirement Plan Documents Must Be Restated for EGTR

Economic Growth and Tax Relief Reconciliation Act

The IRS will now review restated plan documents either every five or six years, depending on the type of plan document (individually designed, pre-approved prototype, or volume submitter). Pre-approved plan documents (also referred to as prototype and volume submitter) will be required to be restated every six years.

For employers sponsoring individually designed plans who have a 1 or 6 as the last digit of their EIN, plan amendments and IRS submissions are due by January 31, 2007. Plan documents for individually designed retirement plans will be required to be restated every five years and must be submitted to the IRS based on the schedule below:

Staggered Five-Year Reporting for Individually Designed Retirement Plans

Cycle	Last Digit of Employer’s EIN	Special Situations	EGTRRA Filing Cycle	Next Filing Cycle
A	1 or 6		2.1.06 – 1.31.07	2.1.11 – 1.31.12
B	2 or 7	All Multiple Employer Plans	2.1.07 – 1.31.08	2.1.12 – 1.31.13
C	3 or 8	All Governmental Plans	2.1.08 – 1.31.09	2.1.13 – 1.31.14
D	4 or 9	All Multiemployer Plans	2.1.09 – 1.31.10	2.1.14 – 1.31.15
E	5 or 0		2.1.10 – 1.31.11	2.1.15 – 1.31.16

More and more employers that sponsor defined contribution plans (profit-sharing, 401(k), and money-purchase plans) have concluded to utilize pre-approved plans rather than individually designed plans because of their flexibility and cost effectiveness. As noted above, pre-approved document providers are on a six-year reporting cycle and have already submitted their documents to the IRS for review, but the IRS has not yet approved any of them, and individual employers sponsoring plans are not expected to have to adopt amendments before the end of 2007.

Required Action

Employers should have their plans reviewed by their third-party administrator, consultant, or attorney to determine:

The type of plan they have
When, or if, they need to amend their plan
Adopters of individually designed plans may elect to switch to a prototype or a volume submitter plan. To accomplish this, employers must execute IRS Form 8905, Certification of Intent to Adopt a Pre-Approved Plan, or adopt a pre-approved plan prior to the end of their cycle noted in the above chart.

We'll be pleased to assist you to determine your plan document type and what action, if any, you may be required to pursue to remain compliant with the Economic Growth and Tax Relief Reconciliation Act. To contact us - Click Here.

Source: www.IRS.gov

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Information is provided for review and consideration only. Please consult legal and tax advisors for practical advice pertaining to your business and personal situations.

This page was last updated on Thursday, August 28, 2008 08:26 AM